Monday, April 4, 2022

Sanctions evasion suspected as Russian tankers go dark

 

The US has banned imports of Russian oil and gas, while the UK will phase out oil imports by the end of the year. Bloomberg

https://www.afr.com/companies/transport/sanctions-evasion-suspected-as-russian-tankers-go-dark-20220328-p5a8os 

Hong Kong | Russian tankers carrying oil chemicals and oil products are increasingly concealing their movements, a phenomenon that some maritime experts warn could signal attempts to evade unprecedented sanctions prompted by the invasion of Ukraine.
In the week ended March 25, there were at least 33 occurrences of so-called “dark activity” – operating while onboard systems to transmit their locations are turned off – by Russian tankers, said Windward, an Israeli consultancy that specialises in maritime risk using artificial intelligence and satellite imagery. That’s more than double the weekly average of 14 in the past year.
The dark operations occurred mainly in or around Russia’s exclusive economic zone, according to Windward, which conducted the research at Bloomberg’s request. The ships engaging in dark activity include vessels connected to big corporations and multinational shipping firms, as well as small businesses, according to Windward.
The US has banned imports of Russian oil and gas, while the UK will phase out oil imports by the end of the year. Bloomberg
Commercial vessels are required by international maritime law to have their automatic identification system, or AIS, turned on while at sea. Disabling or manipulating a ship’s identification system is at the top of deceptive shipping practices cited by the US Treasury Department in an advisory last May to curb illicit shipping and sanctions evasions.
“There’s no reason why they should have their AIS turned off,” said Gur Sender, Windward’s program manager, who specialises in compliance and risk issues. “Investigating if a vessel is engaged in deceptive shipping practices related to specific regimes is crucial to protect your business from dealing with sanctioned entities.”
 
Since the February 24 invasion of Ukraine, the US, UK and other allies have ramped up sanctions against the Kremlin. US President Joe Biden issued an executive order on March 8 banning imports of Russian oil and gas, while the UK said it will phase out oil imports by the end of the year. Both countries, along with Canada, have also barred Russian ships from accessing their ports.
As more countries and businesses shun commerce with Russia, the country’s fleet will be under pressure to conduct dark activity and even engage in illicit shipping to stay afloat, said Ian Ralby, chief executive of IR Consilium, a maritime law and security consulting firm that works with governments.

Susceptible to ‘criminal manipulation’

“Russia has quickly become a pariah state, so they are obscuring some of their activities because a lot of people on both ends of a transit don’t want any association to Russia,” Mr Ralby said.
“Anywhere that Russia appears in the overall management or operation and ownership of the vessel, there are concerns about dark activity right now. Almost anything that they are going to be doing is gaining scrutiny and legal concerns because of all the various sanctions.”
If the isolation of Russian ships and crew continues, they will have little choice but to take any offers they get, making them susceptible to “all sorts of criminal and nefarious manipulation”, said Mr Ralby. “We may see a parallel global market emerge where there is internal trading among all these sanctioned states and their enablers,” he said.
In many of the cases of dark activity, operations are conducted between a Russian-flagged or owned ship and non-Russian vessels, according to Windward. Ships that conduct operations side by side exhibit telltale patterns of movements and speed, even if their transponders are off. Satellite imagery can also reveal operations.
Windward’s data shows that the number of ship-to-ship meetings that lasted at least three hours between Russian oil tankers and non-Russian vessels has remained relatively normal. That’s enough time to allow oil tankers to transfer their goods to a third vessel that is not affected by sanctions or bans, said Mr Sender.
The occurrences are also happening close enough to ports where ships can potentially load up on clean fuel products, he said.
Windward has also detected some vessels entering Russian territorial waters and visiting its ports for the very first time, even as the overall number of ships making a maiden voyage to Russia falls.
Since the outbreak of the conflict, 22 unique vessels -–some of which are owned or operated by companies registered in the UK, US and Germany – have entered Russian territorial waters for the first time, according to Windward.
The US ban on Russian oil came into effect March 8 for new purchases, but provides a 45-day window for US buyers to wind down their existing contracts.
“While this voyage is not considered illegal or a violation of sanctions, it still raises questions” given current US policies, according to a Windward AI Insights note. “It will be interesting to see if this trend continues and how many companies will view these new regulations and restrictions as mere recommendations.”

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